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Document Details

The amendments this document makes to 2 CFR part 1 are effective on August 31, 2005.

Effective Date:

08/31/2005

Document Type:

Rule

Document Citation:

70 FR 51861

Page:

51861-51863
(3 pages)

CFR:

2 CFR 1

Document Number:

05-16646

Document Details

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Start PreambleStart Printed Page 51862

AGENCY:

Office of Management and Budget.

ACTION:

Publication of policy guidance in 2 CFR subtitle A.

SUMMARY:

This document and the four Federal Register documents following it in this issue of the Federal Register are related to a broad initiative that established Title 2 of the Code of Federal Regulations (CFR) as the single location where the public can find both OMB guidance for grants and agreements and the associated Federal agency implementing regulations. The Federal Register document that established Title 2 CFR (see the SUPPLEMENTARY INFORMATION section) describes this broad initiative. The initiative provides a good foundation for streamlining and simplifying the policy framework for grants and agreements, which is one objective of OMB and the Federal agencies in implementing the Federal Financial Assistance Management Improvement Act of 1999 (Pub. L. 106-107).

The Federal Register documents following this one publish four additional parts in subtitle A, 2 CFR. These four parts contain guidance to Federal agencies that presently is in three separate OMB circulars and one other OMB policy document. The four documents following this one are discussed further in the SUPPLEMENTARY INFORMATION section of this document.

This first document provides an overview for the sequence of the five Federal Register documents published by OMB in this issue of the Federal Register. It also makes changes to 2 CFR part 1, the part in 2 CFR that provides general information about the title. The changes conform part 1 with the four parts of OMB guidance added by the documents following this one.

DATES:

The amendments this document makes to 2 CFR part 1 are effective on August 31, 2005.

SUPPLEMENTARY INFORMATION:

On May 11, 2004, OMB established title 2 CFR with two subtitles [69 FR 26276]. Subtitle A, “Government-wide Grants and Agreements,” contains OMB policy guidance to Federal agencies on grants and agreements. Subtitle B, “Federal Agency Regulations for Grants and Agreements,” will contain Federal agencies' regulatory implementation of the OMB guidance, as it applies to grants and other financial assistance agreements and nonprocurement transactions (for portions of the guidance applicable to procurement contracts, implementation for procurement will continue to be in the Federal Acquisition Regulation in title 48 CFR).

As stated in the Federal Register notice establishing title 2 CFR, OMB plans to publish its guidance in subtitle A of that title in two phases. In the first phase, OMB is relocating the circulars in their current form into chapter II of subtitle A. In the second phase, OMB will publish guidance in chapter I of subtitle A after: (1) Proposing for public comment any changes to streamline and simplify the guidance based on recommendations from the interagency working groups implementing Public Law 106-107; and (2) resolving the comments and finalizing the guidance with the help of the working groups.

The four Federal Register documents following this one publish four OMB guidance documents in subtitle A. The first, which is the document immediately following this one, publishes the OMB guidance on nonprocurement debarment and suspension in subtitle A, chapter I, part 180. OMB is publishing this guidance in chapter I because the substance is up to date, and we therefore do not expect the interagency working groups implementing Public Law 106-107 to propose any changes to it in the near future. The guidance is up to date because it is substantively the same as the common rule that 33 Federal agencies recently updated [68 FR 66534, November 26, 2003] after resolving public comments.

The other three Federal Register documents published today relocate OMB Circulars A-21, A-87, and A-122, the OMB circulars with cost principles, in their current form, into chapter II of subtitle A. An interagency working group under Public Law 106-107 is still considering proposals for streamlining these circulars. We will move the circulars to chapter I after any streamlining is completed (any proposals for substantive change will be published first, with an opportunity for public comment).

Conforming changes to 2 CFR part 1. The publication of the OMB guidance on nonprocurement debarment and suspension and OMB Circulars A-21, A-87 and A-122 as parts 180, 220, 225, and 230 in 2 CFR warrants conforming changes in §§ 1.205 and 1.215 of 2 CFR part 1. The amendment to § 1.215 adds references to the four new parts to the table in that section, to explain the relationship of the parts to their previous issuances as OMB circulars.

The amendments to § 1.205 clarify the statement in that section that the types of instruments subject to the guidance in subtitle A of 2 CFR vary from one part of the guidance to another. With the relocation of the cost principles in subtitle A, we are adding a statement to clarify that all portions of the guidance in subtitle A of 2 CFR apply to grants and cooperative agreements, some portions apply to other types of financial assistance or nonprocurement instruments, and some portions indirectly apply to procurement contracts. We are adding new paragraphs § 1.205(b) and (c) that give:

The guidelines on debarment and suspension as an example of guidance that applies to nonprocurement instruments in general, and not just financial assistance; and

The cost principles in 2 CFR parts 220, 225, and 230 as specific examples of guidance that applies to procurement, as well as financial assistance. Circulars A-21, A-87, and A-122 always have provided guidance to Federal agencies on costs that are allowable for reimbursement under procurement contracts to educational, governmental, and other nonprofit organizations, respectively. It should be noted, however, that the regulation formally imposing that requirement on Federal agencies' contracts is not in 2 CFR but in subparts 31.3, 31.6, and 31.7 of 48 CFR part 31 in the Federal Acquisition Regulation (FAR).

The types of instruments that are subject to the guidance in this subtitle vary from one portion of the guidance to another (note that each part identifies the types of instruments to which it applies). All portions of the guidance apply to grants and cooperative agreements, some portions also apply to other types of financial assistance or nonprocurement instruments, and some portions also apply to procurement contracts. For example, the:

(a) Guidance on debarment and suspension in part 180 of this subtitle applies broadly to all financial assistance and other nonprocurement transactions, and not just to grants and cooperative agreements.

(b) Cost principles in parts 220, 225 and 230 of this subtitle apply to procurement contracts, as well as to financial assistance, although those principles are implemented for procurement contracts through the Federal Acquisition Regulation in Title 48 of the CFR, rather than through Federal agency regulations on grants and agreements in this title.

Although some of the guidance was organized differently within OMB circulars or other documents, much of the guidance in this subtitle existed prior to the establishment of title 2 of the CFR. Specifically:

Guidance in . . .

On . . .

Previously was in . . .

(a) Chapter I, part 180

Nonprocurement debarment and suspension

OMB guidance that conforms with the government-wide common rule (see 60 FR 33036, June 26, 1995).